NEW YORK (TheStreet) -- Back in the 1960s, the concept of fair-trade coffee was confined to do-gooder churches and charity shops, which believed that the poor would benefit from it. Today, fair trade wears the garb of an opportunistic culture that several corporate bellwethers, including Starbucks (SBUX), Whole Foods Market (WFM) and Keurig Green Mountain, (GMCR) are embracing.
The strategic positioning of fair-trade-certified products has catalyzed a wave of stupendous marketing success that has big-league retailers jostling one another to get a piece of the pie. There's only one problem. The fair-trade program, originally designed to help 1.24 million farmers around the world, now fails to provide them any deliverance from the shackles of poverty.
For every dollar spent by an American consumer to purchase a fair-trade product, only 3 cents is transferred to the producer in the country it came from. That is the calculation of Senegalese development economist and former Fair Trade International employee Ndongo Samba Sylla, in his book Fair Trade Scandal: Marketing Poverty to Benefit the Rich. The remaining 97 cents either flows into the pockets of the big-brand retailers or ends up in the hands of the wrong country.
WATCH: More feature videos on TheStreet TV Mary Jo Cook, a chief impact officer at Fair Trade USA, emphasizes that the entry of big brands into the fair-trade market has been attributable to increased consumer interest and the ensuing sales jump.
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